Gordhan’s intervention in Guptas bank row would be unlawful: Absa

Pravin Gordhan intervening in the impasse between the country’s big banks and Gupta-owned companies would be illegal and beyond the legal scope of his legal powers.

That’s according to an answering affidavit‚ dated December 22‚ released by Absa in the matter between the minister of finance and various Gupta-owned businesses.

The country’s major banks are named as respondents in the case which deals with their decisions to terminate services with the controversial family.

Gordhan had in October approached the North Gauteng High Court in Pretoria to order that he has no authority to stop banks from closing the accounts linked to the politically connected Guptas‚ following repeated requests to do so by the companies and other ministers.

Absa’s head of compliance‚ Yasmin Masithela‚ deposed an affidavit – released on Thursday - on behalf of the bank in response to Gordhan’s application.

In it‚ she said that Gordhan’s intervention would “have greatly undermined confidence in the banking sector and raised the spectre of state intervention in private commercial relationships‚ arbitrarily and at the instance of a select group of companies and persons”.

“This would have set a dangerous precedent for the banking industry as a whole‚ would have been contrary to the public interest and would have created real risks for the confidentiality of the relationship between banks and clients‚”Masithela said.

She also said that it would have compromised Absa’s “relationship as a correspondent bank with its international clearing banks”.

In his affidavit‚ Gordhan had noted 72 flagged transactions totalling about R6.8-billion by the Guptas and their companies.

Earlier this month‚ First Rand Bank said an order indicating that ministers cannot intervene in the relationship between banks and their clients would encourage public officials to act according to the law.

In an affidavit supporting Gordhan’s application for such an order in relation to the closure of the Gupta family bank accounts‚ First Rand CEO Johan Burger said he had not met an interministerial committee that was headed by Mineral Resources Minister Mosebenzi Zwane because there was uncertainty over the legality of the committee at the time.

Burger said in the affidavit it was "in the public interest" to grant the order.

READ THE FULL AFFIDAVIT BELOW:

– TMG Digital